So, what exactly does business insurance for freelancers entail? We're here to assist you in answering that question. In this guide, we'll go over some of the most important policies to consider (as well as what they cover) when looking for freelance business insurance. We'll also go over typical costs and some top providers to help you find the right insurance for your freelance or contracting business.

The most common types of business insurance for freelancers

Even if you don't have a physical location or work with a large team as a freelancer, you can still benefit from business insurance. After all, business insurance can shield you from financial, legal, or other claims in the event of an accident, lawsuit, natural disaster, or other unexpected occurrence.

Assume you're a freelance handyman: what if a TV you installed falls and injures your customer? Similarly, what if you're a freelance designer and your computer breaks, causing you to lose all of your work for a client? Freelance business insurance can protect you in these types of unexpected situations.

Having said that, while some types of insurance—for example, business liability insurance—will be the same policies that any traditional business owner should consider, there are also specific policy options that will be more important and unique to freelancers.

1. General liability insurance

To begin with, this is one of the most important insurance policies for freelancers and small business owners alike. General liability insurance can protect against common workplace accidents such as property damage or injuries involving a third party—this type of business insurance can even benefit people who work from home.

Assume a delivery person slips and falls while delivering toner to a home office. The delivery person's medical bills may be covered by a general liability policy. Similarly, if you're a web designer and you spill coffee on a client's laptop during a presentation, your general liability insurance may cover the cost of repairing or replacing the laptop.

Furthermore, and especially important for many freelance professionals, this policy protects against advertising injuries, which include:

• Libel
• Slander
• Infringement on trademarks and copyright

As a result, this type of policy can legally cover freelancers if they say or write something negative about a competitor, or if they're accused of using someone else's copyrighted material, such as photographs, without permission.

2. Professional liability insurance

Unlike general liability insurance, which protects against claims of property damage or personal injury, professional liability insurance can help cover legal fees for lawsuits and claims relating to professional services. As a result, professional liability insurance is unquestionably a type of business insurance that many freelancers should investigate.

Professional liability insurance, for example, can cover legal fees for an architect accused of cost overruns due to missed deadlines or a plumber whose failure to repair a pipe caused water damage.

Overall, this policy, also known as errors and omissions insurance, protects freelancers accused of professional mistakes, such as:

• submitting work that is late or incomplete
• Making an error
• They are being careless with their work.

As a result, if you, as a freelancer or contractor, are sued for the quality of your professional services, this policy can cover the costs of hiring a lawyer as well as any judgments for which you are found liable.

3. Cyber liability insurance

Next, as one of the most important types of business insurance for freelancers, consider cyber liability insurance. Many freelancers and other professionals perform and manage much of their work online, which means that one of the greatest risks you may face in the course of business is the threat of a data breach.

As you might expect, data breaches are not only inconvenient but also costly. The average cost of a small business data breach is $86,500, according to a report by internet security firm Kaspersky Labs. As a result, without cyber liability insurance, a breach has the potential to wipe out your finances.

Having said that, if you're a freelancer who stores sensitive customer data, such as credit card numbers, you may benefit from cyber liability coverage. This freelancer business insurance policy can help pay for the following in the event of a breach:

• Customers who are affected will be notified.
• Forensic services will be used to determine how the breach occurred.
• Legal services are provided to ensure regulatory compliance.
• Services for monitoring customer credit and fraud
• Expenses for business interruption

Although anyone can be a victim of a cyberattack, freelancers in fields such as health care and finance are more likely to be targeted.

4. Business interruption insurance

This type of freelancer business insurance is especially important if an unexpected event occurs that prevents you from doing business. Riots, theft, and vandalism, for example, are typically covered by business interruption insurance.

However, not all natural disasters are covered by this type of policy, so if your freelance business is located in a flood-prone area, you may need to purchase a separate policy.

Nonetheless, this insurance may assist you in covering the costs of:

• Lost income
• Taxes
• Relocation
• Lease payments

Although business interruption insurance may not be the most important policy to consider as a freelancer, it is certainly worth investigating depending on your industry, circumstances, and location. If you work as a full-time freelancer, for example, this type of insurance may be especially beneficial.

5. Personal insurance

Finally, while not technically business insurance for freelancers, it's important to remember that as a freelancer, you should also invest in insurance to protect yourself as an individual. If you have a side hustle and are covered by your primary employer's insurance, you may not need to worry about personal policies. If you're a full-time freelancer, on the other hand, you'll want to make sure you have all of the policies you need to protect yourself and your family.

Some policies you may want to consider include:

• Life insurance
• Health insurance
• Disability insurance
• Home, auto, and renters insurance

With the increasing number of freelance professionals working today, there are now companies that specialize in personal freelancer insurance. Furthermore, professional organizations such as the Freelancers Union can assist you in learning more about personal insurance, including what types of policies you require and where to obtain them.

Other types of business insurance for freelancers

Overall, these five types of insurance are likely to be the most important policies to consider when looking for business insurance for freelancers. However, depending on the specifics of your business and what you do, there are other policies you may want to consider, such as:

• Commercial auto insurance: If you use your car for freelance work, commercial auto insurance can protect you in the event of an accident or vehicle damage.
• Rideshare insurance: This type of freelancer business insurance is designed specifically for those who drive for rideshare companies. Rideshare insurance can provide drivers with liability and damage coverage, filling gaps in their personal auto insurance and that of the rideshare companies themselves.
• Commercial property insurance: Commercial property insurance can help protect the investment you make in your business by covering equipment such as computers, tools, and office furniture. If you believe you require commercial property insurance, you may want to consider a business owner's policy, or BOP, which combines general liability and commercial property coverage at a lower cost than if the policies were purchased separately.
• Special event insurance: There are two types of special event insurance that freelancers may be eligible for. First, there is special event insurance, which protects event organizers from legal claims for property damage or bodily injury. On the other hand, special event insurance protects event workers such as professional photographers, caterers, and security personnel from liability claims arising from their work at an event.
• Intellectual property insurance: As a freelancer, you may agree to give up your intellectual property rights as part of a contract with your client. If you are a freelancer or contractor and want to protect your rights to trademarks, patents, or copyrighted material that you create, you should consider purchasing intellectual property insurance. This type of business insurance may be especially beneficial for designers, inventors, and other similar freelance professionals.

How much does business insurance for freelancers cost?

As a freelancer or contractor, you're probably working on a shoestring budget, especially if you have a simple side hustle and aren't freelancing full-time. With this in mind, you may be wondering how much freelancer business insurance costs. Fortunately, depending on the type of freelance or contract business you run, your insurance costs may be lower than those of many other small business owners—in general, a freelance designer poses less risk than a restaurant owner.

However, when it comes down to it, the cost of your freelancer business insurance will be determined by a variety of factors such as what you do, your industry, your length of time in business, and more. Furthermore, if you require multiple policies with broad coverage, your costs will almost certainly be higher than if you only require a single policy with adequate coverage. For example, according to the insurance company Pogo, freelancers and self-employed professionals pay an average of $400 per year for general liability insurance.

Again, depending on the policies you require, purchasing a customizable business owner's policy is a great way to save money on business insurance as a freelancer (or any business owner). Although BOPs typically include general liability insurance, commercial property insurance, and business interruption insurance, depending on the provider you work with, you may be able to include other types of policies as well.

In general, as a freelancer, you are unlikely to require a higher coverage amount or a large number of policies. To keep your costs low, look for a provider with experience in business insurance for freelancers who can assist you in finding coverage that meets your specific needs and budget.

Where to get freelancer business insurance

So, if you believe you require business insurance for your freelance business, you should consider the types of policies you require, the amount of coverage you require, and, of course, where to obtain your business insurance. Finally, as with many other business products, there are a variety of providers who can assist you in finding the insurance you require as a freelancer or contractor.

As previously stated, there are some providers who specialize in working with freelancers and may be more helpful in locating the coverage and policies that are right for you. Consider the following in particular:

Hiscox

Hiscox is a well-known, top-rated insurance company that offers a wide range of policies, from general liability insurance to more specialized policies such as commercial crime insurance. With Hiscox, you can quickly and easily obtain a business insurance quote online, as well as purchase a policy based on the quote.

Although Hiscox works with a wide range of businesses, they are particularly well-suited to those in need of industry-specific policies, such as designers, marketers, and other media professionals, architects, landscapers, and contractors, as well as IT and tech professionals.

Because Hiscox works with so many freelancers, contractors, and other self-employed professionals, their policies and agents are well-suited to these types of business owners' insurance needs.

Next Insurance

Next Insurance, like Hiscox, is designed not only for different types of business owners, but also for those who want to browse and purchase insurance policies in the simplest way possible. You can complete the entire insurance-buying process online with Next and still receive personalized assistance and attention from their insurance professionals.

Next Insurance focuses on a few policies, such as general liability, professional liability, and commercial auto, which are some of the first policies that most freelancers should look for. Furthermore, as seen on their website, Next Insurance, like Hiscox, works with a variety of freelance and contractor-specific industries, including beauty, fitness, education, cleaning, consulting, and others.

Furthermore, as an online-focused company, Next allows you to manage all of your policies online, including accessing free certificates of coverage (especially important if a client requires proof of insurance), adding additional insureds, accessing support, and filing a claim.

Thimble

Finally, if you're a freelancer who doesn't want to commit to an annual insurance policy, Thimble is a good option. Thimble offers general liability insurance to freelancers and contractors who require policies based on the hours they work. Thimble, unlike other insurance companies, offers hourly, daily, and monthly insurance policies. As a result, if you're a photographer who only needs insurance for a day shoot, you don't need to invest in an annual policy that you won't use.

Thimble allows you to enter your basic information and receive a bindable quote in minutes—either online or via their mobile app. After reviewing the quote, you can purchase a policy, receive all pertinent information online, and even add crew members, additional insureds, and send certificates of insurance at no additional cost. Although the majority of Thimble's policies are general liability, they also offer some professional liability policies.

Finally, Thimble will be one of your top choices if you're looking for a business insurance provider that's specifically designed to accommodate freelancers and contractors (and their schedules).

The bottom line

At the end of the day, if you're a freelancer, business insurance may not be at the forefront of your mind as you begin and manage your operations. Investing in business insurance now, on the other hand, can help save your company from unexpected costs or claims in the future. Even if you have a side hustle or are just starting your full-time freelance business, having the proper insurance coverage can be critical to your future growth and success.

However, the specific types of freelancer insurance you require will be determined by the specifics of your business. As a result, it's best to work with a business insurance company that has experience in the freelance industry and can work directly with you to find the best options for your needs to ensure that you're getting the right policies and value for your budget.

Furthermore, if you're unsure about the risks you might face as a freelancer or what insurance you might need to meet contractual requirements, you can always consult with a business attorney—these professionals can answer any questions you have and ensure you're doing everything possible to mitigate your risks effectively.